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The Importance of Proximity to Death in Modeling Future Drug Expenditures for Older People in New Zealand

Research Field:

Life Sciences

Resource Type:

Storage

Resource Type:

Compute

Resource Class:

C

Lead PI:

Prof Charles Normand

Abstract:

It is vital for expenditure forecasts and ultimately health policy to fully understand the relationship between age, death and health care expenditure (HCE). Studies frequently associate ageing with higher health care costs. The New Zealand population over 65 years of age is predicted to more than double by 2030 while those in the 15 to 39 age group decline by a quarter (Statistics New Zealand, 2009). Thus policy makers in New Zealand are concerned about a health care cost explosion to accompany the anticipated population shift. While age may be important to an extent, several studies have looked at other determinants of health care costs, notably proximity to death (PTD). Studies suggest that proximity to death is a more important driver of health care costs than age alone. But there are limited studies of prescription expenditures. This is particularly relevant to New Zealand where expenditures on prescription drugs have risen significantly in the last two decades. Gaining an understanding of what effects health care expenditure in this area will help policy makers to more accurately predict and control future spending. This study develops an economic model for forecasting future public expenditures on prescription drugs for the New Zealand population over 70 taking proximity to death into account.